Global information company, The NPD Group says weekly spend in British foodservice in April 2020 was just over £200m, compared to April 2019’s weekly spend level of around £1bn – a fall of 80%.
In addition, the decline in British out-of-home (OOH) foodservice visits in April 2020 was almost three times as severe as the collapse seen during the financial crisis of 2008-2010.
Lockdown officially started on 23 March, but many people were already avoiding eating out, meaning that by the end of Q1 2020 there was a 10% year-on-year deterioration in OOH visits. This decline accelerated dramatically in April and for the two-month period of March and April 2020 the fall was 54%.
Price and deal-related visits reached record levels in April. More than 28% of visits were influenced by whether an outlet could offer a good price, the highest percentage ever seen in the month of April, including during the financial crisis. Visits made using a meal deal were also the highest ever seen for any April, at 32%, and the average bill on deal was 5% higher than average.
Personal or online recommendations became increasingly important in April 2020, accounting for nearly 8% of visits in comparison to the 4% to 5% level seen in the past five years. At dinner time, personal or online recommendations accounted for almost 10% of all visits, compared to the usual figure of 4%. The importance of ‘quality’ offered by a foodservice outlet rose by one third year-on-year, with consumers likely associating quality with hygiene.
Dominic Allport, Insights Director (Foodservice), The NPD Group, said, “The scale of the crash in out-of-home foodservice visits is unprecedented and the 80% fall in spend underlines the severity of the collapse. As we start to come out of lockdown, consumers are likely to be sensitive to prices and value for money. Value-related visits should increase rapidly in the same way as the 2008-2010 financial crisis when price-driven or voucher-driven visits rose sharply.
'We also expect deal-based visits to increase as they did in the financial crisis: they grew by over a quarter even though the overall market registered a 2% visit decline. The importance of meal deals is likely to grow as operators fight for market share. Operators are now more savvy about these deals, and they know that consumers that buy on ‘value’ can often spend more if the product range and offering is right.
'However, it’s important to sound a note of caution. While reopening and initial recovery is imminent, and the relaxation of social distancing is welcome, the eating-out industry has a huge task ahead if it is to return to anything like normal trading. The good news is this is an extremely innovative and creative sector, and we know it will adapt fast to create the ‘new normal’.”
All data here is for the British ‘Out of Home’ (OOH) foodservice market, comprising:
QSR (quick-service restaurants) including burger and bakery chains
Casual dining brands
FSR (full-service restaurants)
Travel & leisure (travel hubs, hotels, department stores, on-board catering, bars, clubs etc.)
Visits can mean on-premise or off-premise.